The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1887-03-14
PROFIT SHARING.
How the System Works in France and What
1t Has Accomplished.

piled first to the necessary repairs and renewals;
next to pay interest on the capital involved;
third to pay wages at market rates. including =
salary-the wages OF superintendence-to the I
employer, as financial manager of the business.
And, finally, fixed per cent. is usually SUBJ
tracted to form reserve fund in of loss.
The net profit which remains is divided among
all those who have united to produce it; that is,
the employer and his workmen.
Over a hundred European firms practice profit
sharing. and of these about one-half are French.
The system has endured the test of age, for by
three of these French firms it has been success
fully employed for more than forty years. tits
evidently growing in favor, for it has been
adopted by fifteen since 1879. It would scarcely
be possible to suggest direction in which the
principle has not been experimentaly tested.
All varieties of business are organized on this
basis; small firms which employ only few men
and large industrial establishments whose fnan- 4
clal standing is secure; manufacturers of pianos,
furniture, mathematical instruments, steam en-
gines and chocolate; large distributlve enter
prses, foundries, printing establishments, in
surance companies, railways and farms. The
"Au Bon Marche," one of the largest shops in
the world; the Maison LeclaIre, the celebrated
establishment of house painters; the publishing
house of A. Chalk ct Gle, which prints the rail-
road literature and official time tables of France;
the foundry of NJ. Godin, in Guise, which en-
ploys 1900 men; the Paris & Orleans railway
and the company of the Suez canal are we'll
known business firms administered on this prin-
ciple.
The details of its application are very diverse.
The amount of profit allotted to labor varies
from 2 to IS per cent. This share is sometimes
paid entirely as money premium, sometimes
capitalized for each workman to form pension
Of retreat. or, more often, divided aid applied to
both these objects
The advocates Of the participating principle
Go not quarrel with the present wage system and
they admit that the rate of payment will always
be determined by competition; all the workmen
of these establishments receive wages at the Or
binary rates. 1t is merely claimed that a labor
iyy art g mar nyvnar nj m "a.
terial values. and that he has, therefore, over
and above his wages, right to share in the
gains of business, just as the employer, beside
his interest money and his salary of manage
ment, has his clear right to profit.
But justice to the workingman is not the only
object of profit sharing in France. These en-
pioyers very practical men, and adhere to
the system because of the stability, harmony
and working power which it lends to a business
They believe that by this incentive to the am
bitlou and industry of the laborer the quality OF
the work will be improved and his fidelity to the
interests of the business secured. The results :,
| have justified all these expectations A careful
use of tools. unquestioning obedience to d. 4
rectoD, saving of time and materials have be-
| come the fixed habits of the work-people. The
| cost of superintendent has been greatly re-
| duced. for each man keeps watch over himself
| and over his fellows, knowing that loss to the
| firm entails loss to himself. Nj. Caste
esa that profits by the him
his workmen, simply through their economical
use OF photographic stones NJ. Leclaire always
| noticed that his house painters saved and gained
| nearly one franc day per man in the gross
earnings of the firm as their own inter
ests in the profits stimulated their zeal and
| economy.
In these participating houses the employers
have no longer to struggle against the combina-
tions of workingmen Combination remains.
| but becomes, NJ. Jevons expresses it, ''vertl-
cal, not horizontal not union of workngmen
| against their employers, but harmonious ASSOC
| citation of each employer with his workmen.
For instance in 1878, when all the other paintera
of Paris had joined in strike, the laborers of J
| the Maison Leclaire continued steadily at work.
often working fourteen hours day, on account
| Of extra orders. In a similar general strike
| among printers. only thirty out of $50 left the
ateliers Of the Chalk printing-nouse, aud all of
| these belonged to the class of new hands, not
yet admitted to the advantages of participation.
| The Paris firms which have longest used this
method of remunerating labor passed through
| the crucial test of the siege and the Commune.
| / conversed with several men who were in the
| Maison Leclaire that time. They assured me
that the men not only remained at their worE,
so far possible but were always ready to rally
for the defense of the property II lived through
the SIEGE" writes III. Gof1non. the head OF par
| tcipating firm, lin the midst OF my workMen.
lived through the Commune, till April l6, 1871,
and give you two conclusive proofs that profit
| sharing will stand the test of loss and hard
| times. Not one Of my participating workmen,
| who was alive after the Commune, failed to
| answer to our roll-caH And those who remained
| in Paris after my own departure protected our
industrial enterprise from the attacks of Social
| lists regarding it as property common to them
| selves and to me-"
1t cannot be reiterated too often that profit
sharing in France is not benevolent orgari
cation. It is an offspring of French sagacity.
| NJ. Leclaire was the pioneer of the movement,
| and the founder OF a business which pays 70 per
cent. of it's profits to its workmen. He started
with no capital, save his hands and his brains,
and left behind him fortune of $250,000. II
| maintain he wrote. that If / had gone on in
| the beaten track could not have arrived, even
| by fraudulent means. at position comparable
| with that which have made for myself"
| NJ Courcy, manager of the Compagnie d'As.
surauces Generates, which assigns to its en-
ployes per cent of profits, and has thus allotted
since 1850 more than 81, 600. 000 writes in 1880:
my general principle is that there are no thor
| oughly satisfactory business transactions except
those which are satisfactory to both the parties
concerned. Experience has justified our insti-
tuition from each of these points of view 1t is
excellent for the employees and excellent for the
company"
Multiplied testimony of the sort is collected in
the publications of the society, which has been
formed in Paris to study and propagate the sys-
tenn This association is of SO practical a
nature that it admits to its membership only
those who are actively engaged in business. in
order ''to beware of mere theorists" Partly
through its efforts, but largely through the
results Of the system, in the instances where it
has been tested the subject has attained almost
political interest State committees have
repeatedly been formed to investigate cases Of
importance, and it was even proposed to
force the system on all firms und ertaking gov
eminent contracts
Our Correspondents Luck.
Washington Special. >
Mr. 2. S. Heath, who is the Washington cor
respondent OF the Indianapolis Journal and a